Australian citizens and some visitors to the country have access to a universal health insurance scheme called Medicare. However, some Australians opt to purchase private health insurance that provides additional benefits. Hospital and extras cover are two coverage options available in many private health insurance plans. This guide will help you understand the difference between these two covers.
What is the difference between hospital and extras cover?
Hospital cover provides additional coverage for treatment for services covered by Medicare. Extras cover pays for some services that are not covered by Medicare. (Australian Government Department of Health and Aged Care, n.d.)
Hospital cover
Hospital cover helps pay the cost of medical care received as a private patient in hospital. People with private insurance can elect to receive treatment as a private patient in a public or private hospital or day hospital facility.
Hospital services covered
Depending on the policy you purchase, your hospital cover may pay for all or part of your expenses for hospital accommodation costs and theatre costs. Read your hospital and extras cover policy documents to find out what the specific services and amounts covered by your private insurance are.
In-hospital doctor and specialist services covered
Your private insurance policy may cover some or all of the expenses for medical services that Medicare covers. You can access a list of services covered by Medicare on the MBS Online website.
Medicare pays for 75% of the Medicare Benefits Schedule fee for each covered service. Depending on the terms of your policy, your private health insurance pays for 25% to 100% of the cost. You may have to pay any amount that your doctor or specialist charges over the MBS fee yourself. (Australian Government Department of Health and Aged Care, 2022)
Second-tier default benefits
The Australian government assigns some hospitals second-tier default benefits status. If you receive treatment at one of these hospitals, your hospital and extras cover insurance will pay for some or all of your covered expenses, even when your insurer does not have an agreement with the hospital.
Your insurance company will use Schedule 5 — Second-tier default benefits to determine how much it must pay for covered services. The benefit can not be any less than 85% of the average amount charged by other hospitals in the same category. (Australian Government Department of Health and Aged Care, 2021)
Benefit limitation periods (BLPs)
Some hospital and extras cover policies include BLPs that impose an additional waiting period of 24, 36 or more months beyond the standard waiting period for some services. Services subject to BLPs are restricted during the waiting period.
Restrictions
Services that your private insurance only partially covers are called restrictions. As an example, your policy could restrict a particular surgery to full coverage as a private patient in a public hospital, but only partially cover the service if you are a private patient in a private hospital.
Exclusions
Private insurance does not cover any part of the expense for excluded services. Some private insurance policies have both restrictions and exclusions. Others have only one or the other.
Restricted and excluded services vary by policy, but some services are commonly excluded or restricted:
- Cardiac and cardiac-related surgery and other services
- Pregnancy and birth services
- Knee and hip replacements
- Reconstructive and plastic surgery
- Eye lens and cataract procedures
- Infertility services
- Psychiatric and rehabilitation services
What is the impact of restrictions and exclusions?
If you need healthcare services that are restricted or excluded from your policy, you may have to pay out of pocket for those services or wait longer to receive these services as a private patient. The Ombudsman advises consumers to consider the costs and benefits of purchasing a higher level of excess instead of accepting restrictions or exclusions.
What can patients do about restrictions and exclusions?
Review your hospital and extras cover policy at least once per year and make sure you understand any restrictions and exclusions. If you are starting a family or your health needs are changing as you get older, consider whether you need to adjust your coverage.
You can make changes to your policy to remove restrictions and exclusions; however, if you require treatment for a pre-existing condition or maternity services, you must wait 12 months before you can use your new coverage. (Commonwealth Ombudsman, n.d.)
Product tiers
All hospital insurance products are classified as either Gold, Silver, Bronze or Basic. The Australian government assigns tiers based on the minimum level of cover policies offer for treatments in various clinical categories.
Insurance companies that provide cover that exceeds the minimum requirements of a tier can sell their policies as Basic Plus, Bronze Plus or Silver Plus. You can find more information about the services each tier covers in the Private Patients’ Hospital Charter. (Australian Government Department of Health and Aged Care, 2022)
Extras cover
The extras portion of your hospital and extras cover pays for some treatment costs that Medicare does not cover. Coverages vary by policy but commonly include several types of services.
- Physiotherapy
- Home nursing
- Orthodontics
- Glasses and contact lenses
- Chiropractic treatment
- Dental treatment
- Speech therapy
Extras care does not cover the full cost of most services. Most policies pay for a specific percentage of the full cost or a specific annual amount for each service. (Australian Government Department of Health and Aged Care, 2019)
Hospital and extras cover with Health Partners
Health Partners offers affordable, confusion-free hospital and extras cover with generous benefits. With selected extras, you can get 100% of your money back on a proper dental checkup that includes X-rays and cleaning and get 100% back on your optical limit for prescription eyewear, such as glasses and contact lenses. Additionally, on selected hospital cover we offer unlimited road and air emergency services throughout Australia. Terms and conditions apply. Choose from five levels of great value Hospital cover to suit your needs and budget, see full details.
Our hospital cover allows you to avoid public system waiting lists, choose your specialist and treatment facility and stay in a private room where available. Extras cover can reduce your out-of-pocket costs on dental, optical, physiotherapy, pharmacy, massage and chiropractic services. Visit us online to get a quote or find out more.
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References:
Australian Government Department of Health and Aged Care. (n.d.). Medicare. Australian Government Department of Health. Retrieved August 17, 2022, from https://www.health.gov.au/health-topics/medicare
Australian Government Department of Health and Aged Care. (2019, December 24). Extras and ambulance cover. Australian Government Department of Health. Retrieved August 17, 2022, from https://www.health.gov.au/health-topics/private-health-insurance/what-private-health-insurance-covers/extras-and-ambulance-cover#extras-cover
Australian Government Department of Health and Aged Care. (2021, August 18). Out of pocket costs. Australian Government Department of Health. Retrieved August 17, 2022, from https://www.health.gov.au/health-topics/private-health-insurance/what-private-health-insurance-covers/out-of-pocket-costs#secondtier-default-benefits-for-private-hospital-patients
Australian Government Department of Health and Aged Care. (2022, February 17). Hospital cover and product tiers. Australian Government Department of Health. Retrieved August 17, 2022, from https://www.health.gov.au/health-topics/private-health-insurance/what-private-health-insurance-covers/hospital-cover-and-product-tiers
Commonwealth Ombudsman. (n.d.). Policy Exclusions and Restrictions. Commonwealth Ombudsman. Retrieved August 17, 2022, from https://www.ombudsman.gov.au/publications-and-news-pages/publication-pages/brochures-and-factsheets/factsheets/private-health-insurance/policy-exclusions-and-restrictions
Disclaimer
The information contained here is of a general nature and does not take into account your personal medical situation. The information is not a substitute for independent professional medical advice and is not intended to diagnose, treat, cure or prevent any disease or used for therapeutic purposes. Should you require specific medical information, please seek advice from your healthcare practitioner. Health Partners does not accept any liability for any injury, loss or damage incurred by use of or reliance on the information provided.
While we have prepared the information carefully, we can’t guarantee that it is accurate, complete or up-to-date. And while we may mention goods or services provided by others, we aren’t specifically endorsing them and can’t accept responsibility for them.
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Health Partners is committed to providing quality and affordable health care, and we value our members and our obligation to protect your privacy. As part of our responsibility in protecting your privacy, from time to time we review our policies to ensure we are meeting our obligations. We have recently made some updates to our Privacy Policy. Please click here to view the Health Partners Privacy Policy.
© Copyright Health Partners. 2024 All Rights Reserved.
Health Partners is committed to providing quality and affordable health care, and we value our members and our obligation to protect your privacy. As part of our responsibility in protecting your privacy, from time to time we review our policies to ensure we are meeting our obligations. We have recently made some updates to our Privacy Policy. Please click here to view the Health Partners Privacy Policy.